nGMS Finance

1
nGMS Finance
2
nGMS

• Contract with practices not GPs
• Payments determined by SFE
• Total sum for primary care allocated to each PCT
• No overall primary care funding formula
• Legal obligation on PCTs to fully fund GMS
  contract
• Financial risk transferred to PCTs

3
Gross Investment Guarantee

• No more national negotiation of GP pay
• Abolition of IANI
• Replaced with total investment in primary care
• Not just GP pay, includes infrastructure costs
• Extra 1.9bn to 8.0bn in 05/06
• 1.3bn in quality framework (GP pay)

4
Funding Streams - comparison

• Old GMS
• Staffing
• Items of Service

• New GMS
• Global sum (less opt-outs)
• Seniority
• Enhanced services
• Quality Framework

5
Staffing

• Global sum incorporates staffing costs
• no more PCT-determined staff budgets
• effectively receive a national average staff
  budget
• increases in staff costs met from total income
• Global sum includes funding for all pension
  contributions, eees and eers for staff and GPs

6
Determination of GS

• Global sum determined on 1st day of quarter (eg
  01 April 2004)
• Contract discussions based on indicative figures
• Indicative figures made assumptions
• Nursing home patients
• Temp residents
• List characteristics _at_ 01/04/03

7
Global Sum 04/05
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Carr-Hill formula

• Weighted capitation methodology
• Age/sex
• Nursing/residential homes (x 1.43)
• List turnover (x 1.46)
• Additional needs (deprivation)
• Market forces (Staff costs )
• Rurality

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Calculation

• EXETER will perform calculation
• Based on practice registration data
• Ensure practice information is timely/accurate
• Two stages by PCT then by practice
• PCT normalising index is average weight
• PCT population normalised annually

PCT x Practice
Practice National PCT
National
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PCT Normalising Index
11
Population Weighting
12
Contractor Weighting
13
Carr-Hill Weighting
14
MPIG

• MPIG as a concept is not transitional perpetual
  !!
• Subject to impact of any formula review
• Not a guarantee of total practice income
• only matches IoS funding in global sum
• most but not all IoS
• includes practice staff reimbursements
• includes all eers pension contributions
• MPIG achieved by topping up Global Sum with
  Correction Factor
• All practices receive GS only MPIGd practices
  get CF

15
Global Sum Equivalent (GSE)

• Baseline data year to 30/06/03
• Take account of GP/staff vacancies and practice
  mergers/splits
• Adjust for SA (7 to 14) for GPs
• Adjust for list size change
• Final GSE calculated _at_ 01 April 2004
• Uplift to 2003/04 prices 2.85
• Uplift to 2004/05 prices 1.47
• Adjust for SA (7 to 14) for staff

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Correction Factor (CF)

• Compare Final GSE to GSC

• If Final GSE gt GSC, the difference is the CF

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MPIG (wrong!)
18
MPIG (right!)
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Service Categorisation

• Essential
• must do
• Additional
• Preferential right (opt-outs available)
• Enhanced
• Directed (DES)
• National (NES)
• Local (LES)

Global Sum
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Opt-outs

• Global sum assumes full delivery of essential and
  additional services, but
• Practices can opt-out of
• Out-of-hours care
• Additional services
• Where practices opt-out, global sum is reduced
  and PCT responsible for effective provision
• Cost of opt outs based on national tariff
• Eg. out-of-hours costs 6 of global sum (NB. Not
  MPIG)
• Approx 6,000 per GP (based on average practice)

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Global Sum

• Weighted capitation methodology (Carr-Hill
  formula)
• Complex, impossible to reproduce at practice
  level
• Ensure basic information is accurate
• Redistribution of existing resources
• Transitional protection (MPIG)
• No account of diseconomies of scale
• Disadvantages small practices

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Seniority

• Changed scheme to improve rewards for experience
• Retrospective to 1 April 2003
• 30 increase in resources by 2005/06
• From April 2004
• Only full payment if receiving gt2/3 av. SA income
• 60 if receiving gt1/3 but lt2/3 av. SA income
• No payment if receiving lt1/3 av. SA income
• Finalised when nat. av. SA income is known

23
Quality Framework

• Points make prizes - 1050 maximum
• 2004/05 77.50/point (for average practice)
• Weighted by relative list size
• raw list size not Carr-Hill weighted
• Disease prevalence factor
• adjusts point value in each clinical domain

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QOF Payments

• Preparation payments (for average practice)
• 04/05 - 3,250
• 05/06 - 0
• Aspiration payments
• For 04/05, aspiration payments are 1/3 of total
• From 05/06, aspiration is 60 of prior years
  achievement
• Achievement payments
• balance of income on outcome
• 04/05 achievement paid by end April 05

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Enhanced Services

• Enhanced services include some historic IoS
• eg. flu vaccs, childhood imms, IUD
• Pricing structure
• DES have fixed price
• NES have benchmark pricing
• LES are locally negotiated
• GMS contractors are only preferred provider for 3
  DES
• Access
• QuIP
• Childhood imms

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Enhanced Services Floor

• Each PCT has a local floor (minimum spend)
• Planned spend signed off by PEC
• Qualifying expenditure discussed with LMC
• Enhanced Services Floor is combined total of
• Fair share of 394m from Unified Budget (in
  04/05)
• Transfer of GMSNCL payments
• PMS equivalent of GMSNCL transfer

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Enhanced Services Floor

• The following spend counts towards the floor
• DES, NES or LES from any provider
• PWSIs
• Plus in PMS Plus / Specialist in specialist PMS
• Local incentive schemes for GMS/PMS providers
• Re-commissioned services (previously placed with
  a NHS trust) providing that
• it was contestable for GMS/PMS contractors
• it might reasonably provided by GMS/PMS
  contractors.

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Pensions

• Significant changes to pension scheme
• Eers contribution rate increases from 7 to 14
  (Indexation)
• Change in mechanism for calculating SA pay for
  GPs
• Adjust global sum for changes
• change in eers rate affects cost of both staff
  and GPs (AWP 40)
• Global sum payment per patient increased from
  50.00 to 54.00
• increased contributions due to increased GP
  income (AWP 43)
• Superannuation premium of 21per patient in 04/05

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Equity for PMS

• Equivalent funding for indexation and
  superannuation premium has been allocated to PCTs
  for PMS.
• PCTs should

• Adjust contract price to secure equity between
  GMS and PMS ie appropriate level (local
  discretion) of eer contributions added to
  contract price
• Adjust PMS contract to reflect changes in
  responsibility regarding funding of contributions

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Administration

• PCTs are responsible for administering payment of
  GPs pension contributions (not picking up the
  tab)
• In year, estimate PCTs must topslice contract to
  cover contributions
• estimate NHS profit (SA pay) for each partner
• Post year-end, actual balancing payment when NHS
  profit is known
• accountants certify NHS profits

31
Pensions

• Historically, contract income (IoS) was paid net
  to practices, PCTs covered cost of eers
  contribution
• Under nGMS, key principle is that total cost to
  the NHS is reflected in SFE payments to practices
• ie. contract income is gross of superannuation
  costs

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Contractor bears the cost

• Paragraph 22.5 of the SFE
• Accordingly, the costs of paying the employers
  and employees superannuation contributions of a
  contractors partner/GPs under the NHS Pensions
  Scheme in respect of their NHS superannuable
  profits from all sources unless superannuated
  for the purposes of the NHS Pension Scheme
  elsewhere are all to be deducted by the PCT
  from the money the PCT pays to the contractor
  pursuant to this SFE.

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NHS Profit

• Old GMS, SA pay was proportion of NHS income
• proportion reflected national average expenses
• From April 2004, SA pay equals profit on NHS work
• reflects actual practice expenses (not national
  average)
• cost of delegated work reduces SA pay (eg locums)

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No risk for PCTs

• It is a matter for the GP how much profit they
  are able to generate from their NHS activities.
• Whatever profit they do generate, a proportion of
  that profit will go to fund pension costs (20
  6 eees, 14 eers)
• Higher profits do not generate higher costs for
  the NHS ie no financial risk for PCTs